AUD/FJD Outlook: Slightly positive, but likely to move sideways, as the rate is above its recent average and lacks a clear driving force.
Key drivers:
- Rate gap: The Reserve Bank of Australia's commitment to potential rate hikes contrasts with the more stable monetary outlook from the Reserve Bank of Fiji, making the AUD more attractive to investors.
- Risk/commodities: As global commodities remain strong, the AUD benefits, especially due to high demand for Australian iron ore and coal, while the FJD has less correlation with commodity trends.
- One macro factor: China's uneven economic recovery continues to impact demand for Australian exports, limiting further AUD gains as the export sector adjusts.
Range: The AUD/FJD is likely to hold near current levels within the recent 3-month range, with fluctuations expected but no significant breakouts.
What could change it:
- Upside risk: A strong employment report or higher-than-expected inflation in Australia could lead to a swift shift towards rate hikes.
- Downside risk: Any signs of a slowdown in the Australian economy, particularly in export demand from China, could pressure the AUD lower.
